Metcash shares climb on full-year profit jump
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More news: Metcash shares lifted in early trading after the retail group reported a 10% uptick in full-year net profit.
Metcash shares were up 3.5% to $3.83 at 11:35am AEST, extending gains of nearly 24% since the turn of the year.
Metcash reports 10.1% increase in statutory profit after tax to $283m
The news: Retail group Metcash has reported an increase in group statutory profit after tax following a reversal of a previously impaired loan, put option valuation adjustment gains and a series of other net gains.
The numbers: Metcash’s full-year group statutory profit after tax increased 10.1% to $283.3 million.
This included a $15 million gain from a reversal of a previously impaired loan to Dramet Holdings, put option valuation adjustments and a net gain from acquisition costs of $10.1 million, Program Horizon implementation costs of $9.3 million and mega DC transition costs of $8 million.
Meanwhile, group underlying profit after tax decreased 2.4% to $275.5 million. This was driven by lower earnings in the hardware and liquor pillars, increased finance costs and increased depreciation and amortisation.
Earnings before interest, tax, depreciation and amortisation increased 8.6% to $747.8 million while earnings before interest and tax increased 2.3% to $507.8 million.
Group revenue, which excludes charge-through sales, increased 8.9% to $17.3 billion and increased 7.2% to $19.5 billion when including charge-through sales. Revenue growth was experienced under the food, liquor and hardware pillars, partly buoyed by acquisitions.
The Metcash board also said they will pay a final dividend of 9.5 cents per share, which takes total fully franked dividends for the year to 18 cents per share.
This is slightly higher than the company’s annual target payout ratio of about 70% of underlying profit after tax. Payment is expected to be made on 27 August.
What they said: “The business again performed well supported by the successful execution of our strategy and disciplined operational performance,” group chief executive Doug Jones said in a statement to the exchange.
“The increased diversification and resilience of the Group was a key driver of sales and earnings growth in the face of challenging conditions in all pillars, particularly in the hardware pillar where trade activity remained subdued.
“The quality and competitiveness of the independents’ differentiated offer continues to resonate with shoppers, and this again helped underpin sales growth in all pillars.”
